UK house prices increased 2.5% in the year to November 2025 signalling firmer conditions in the sales market despite continued affordability pressures, according to the latest figures from the Office for National Statistics.
The average UK home was valued at £271,000 in November, up from a revised annual increase of 1.9% in October.
The acceleration suggests renewed, albeit modest, momentum in transaction values heading into the final quarter of the year.
In England, average prices rose 2.2% to £293,000. Scotland recorded stronger growth of 4.5%, pushing average values to £193,000, while Wales lagged behind with a 0.7% increase, taking prices to £209,000.
FRAGMENTED MARKET
Scotland is now outpacing England in annual growth terms, while Wales is seeing near-flat price inflation.
The UK-wide annual increase of 2.5% remains subdued compared with post-pandemic peaks but marks an improvement on earlier 2025 readings.
Although published alongside rental data showing private rents up 4.0% annually to £1,368, the sales market figures suggest house price inflation is running below rental growth, reinforcing ongoing affordability constraints for would-be buyers.
With prices rising 2.5% year on year and the average home now costing £271,000, the sales market appears to be stabilising rather than surging – a measured recovery rather than a rebound.
INDUSTRY REACTION
Nathan Emerson, CEO of Propertymark, says: “A slowing in the annual growth of house prices signals ongoing affordability pressures and cautious buyer sentiment.
“While modest price adjustments may improve access for some purchasers, reduced activity can dampen overall market confidence.
“Ensuring a supportive lending environment and increasing housing supply will be critical to maintaining stability and encouraging sustainable levels of market activity.”
He adds: “A slowing in the annual growth of rents may offer some relief for tenants but can also be attributed to localised shifts in demand or changes in supply dynamics.
“However, month on month, rent levels continue on an upward trajectory, therefore, policymakers must focus on creating conditions that encourage investment and maintain adequate rental stock to ensure the sector remains stable and able to meet housing need over the long term.”
PRICES UNDER PRESSURE
Tom Bill, head of UK residential research at Knight Frank, says: “House prices have come under pressure in recent months as the prolonged period of uncertainty before the Budget undermined demand.
“Borrowing costs have fluctuated but weak employment numbers this week and the prospect of inflation returning to its 2% target mean the chances of multiple cuts this year have risen, which will support prices.
“However, the housing market is operating against the backdrop of a Prime Minister on borrowed time and any leadership challenge may derail sentiment in the short term. Affordability is still shaping the house price map of the UK, which can be seen in the contrast between North East England and London.
“Although rents are drifting lower from the highs of the pandemic, red tape and tax are still a concern for landlords.
“The introduction of the Renters’ Rights Act this May adds extra layers of uncertainty around the setting of rents, repossession rules and the ability to sell. In many areas of London we are seeing rents pushed higher as landlords attempt to sell and supply is squeezed.”
MORE HOMES FOR SALE
Richard Donnell, Executive Director at Zoopla, says: “House price growth has slowed across the country with the weakest growth being reported across England with prices falling across London and flat across southern England.
“There are more homes for sale than a year ago across southern England, which is boosting choice for buyers, keeping house price growth in check alongside greater affordability pressures from higher house prices.
“There is more scope for prices to increase away from southern England, where homes are more affordable and there are 3-5% fewer homes for sale than last year.
“Our latest data shows a rebound in demand for home but running 8% below this time last year which points to a continued slowdown in price growth over 2026.
“Rental growth continues to slow on the back of more supply and weaker demand which is a result of a big drop in migration into the UK and a much improved mortgage market for first time buyers.
“This is improving conditions for renters who have more choice of homes to choose from for the first time in five years. We do not see rents falling, but slower growth in rents will be welcome news for renters who have faced steep increase in the cost of living over the last three years.”
SEASONAL DYNAMICS
Iain McKenzie, CEO of The Guild of Property Professionals, says: “The latest UK HPI figures point to a housing market that was stabilising rather than slowing.
“Annual price growth eased to 2.4% in the year to December 2025, with the average UK home now valued at £270,000. This reflects a market finding its natural balance after several years of volatility.
“The modest monthly dip in December is typical for the time of year and, importantly, is less about weakening demand and more about seasonal dynamics and increased supply.”
ROBUST TRANSACTION LEVELS
He adds: “More importantly, transaction levels remained robust, with over 100,000 sales in the month and activity across 2025 running above both 2024 and pre-pandemic norms. This tells us that underlying demand remained resilient.
“Encouragingly, the wider economic backdrop has become more supportive. Inflation easing to around 3% and intensifying competition among lenders are already pushing mortgage rates down, improving affordability, particularly for buyers with larger deposits.
“With around 1.8 million households due to remortgage in 2026, a downward rate trajectory will be welcome relief and should help sustain market confidence.
“We are already seeing sentiment improve in early 2026.”
“We are already seeing sentiment improve in early 2026. Rising wages, easing borrowing costs and a highly competitive mortgage market are expected to support activity levels, with many agents anticipating an uptick in sales volumes this year.
At the same time, a growing supply of homes for sale is giving buyers more choice and will help keep price growth at a sustainable pace.
“Overall, the outlook for 2026 is one of steady, sustainable progress. With prices forecast to rise by around 3.3% and market fundamentals strengthening, we expect a more balanced and accessible housing market to emerge, benefiting both buyers and sellers alike.”
WATCHFUL STABILITY
Nick Leeming, Chairman of national estate agency Jackson-Stops says: “December’s figures suggest the market ended 2025 on firmer footing than many expected, with price growth signalling quiet resilience rather than rapid expansion.
“While activity typically slows in the final weeks of the year, underlying demand has remained steady, particularly in markets where available stock continues to fall short of committed buyer interest.
“The clarity provided by the Autumn Budget is now beginning to translate into greater confidence, and that shift in sentiment helped support pricing as the year closed.
“Buyers are approaching decisions with more certainty around taxation and fiscal policy, even as affordability remains front of mind.
“After this month’s decision to keep rates unchanged, the market remains in a period of watchful stability. If borrowing costs ease as anticipated in the coming weeks and economic conditions remain stable, the market is well positioned for a more active spring than we have seen in recent years.”
KEEPING PRICES IN CHECK
Jeremy Leaf, north London estate agent and a former RICS Residential Chairman, says: “This is the most comprehensive snapshot of all the housing surveys as it includes approximately 40% of cash as well as mortgages sales, showing a steady rather than spectacular improvement in prices.
“Although a little dated, it reflects the period just before and after the Budget so demonstrates considerable buyer and seller resilience at a time of economic uncertainty which we also noticed on the ground.
“Looking forward, December’s modest reduction in interest rates and the prospect of further cuts over the next few months have given the market a lift. However, the amount of stock available and likelihood of even more choice given the increasing number of appraisals, will keep any price increases firmly in check.”
HIGHLY SELECTIVE BUYERS
Damien Jefferies, Founder of Jefferies London, says: “December’s figures reflect the wider theme of the UK property market in 2025, which has been one of resilience in the face of wider economic uncertainty and, whilst seasonality may influence short-term price trends, the strength of the market is clear when analysing the continued increases in property values seen on an annual basis.
“At the higher end of the market, particularly in London, we’re seeing buyers remain highly selective, but also increasingly confident in negotiating realistic value.
“This recalibration is healthy and ensures the market enters 2026 on firmer footing, with more realistic pricing dynamics across both prime and mainstream segments helping to set a firm foundation for another year of property market prosperity.”
IMPROVED AFFORDABILITY
Jason Tebb, President of OnTheMarket, says: “Property values continued to rise on an annual basis in December, with the average price £6,000 higher than a year ago, as there was finally clarity after a prolonged period of uncertainty in the run-up to the Budget.
“However, once again the average UK house price conceals some wide regional disparities, with values in London contracting by 1% on a yearly basis.
“Increased supply, low buyer demand and stretched affordability in the capital – where values tend to be significantly higher than elsewhere – are combining to keep a lid on prices.
“With inflation slowing to 3% in the year to January and moving closer to the Bank of England’s 2% target, this should enable further base-rate reductions.
“The six cuts in base rate over the past 18 months have improved affordability and had a huge positive impact on the market, with any further cuts likely to lead to renewed activity this year.”
SUSTAINED ACTIVITY
Verona Frankish, CEO of Yopa, says: “While house prices have cooled slightly on a month to month basis, it’s important to note that this data relates to December market conditions, a month that is traditionally one of the quietest points in the housing calendar ahead of the Christmas holidays.
“The more important takeaway is that annual growth remains positive at 2.4% and, notably, first-time buyers are continuing to drive a relatively stronger degree of price appreciation, which highlights their determination to realise the dream of homeownership.
“This sustained activity is helping to underpin the wider market and should provide a solid base for momentum for 2026.”
THE LONDON MARKET WILL TURN
Marc von Grundherr, Director of Benham and Reeves, says: “The latest figures show that the UK housing market finished 2025 in reliably steady fashion, with annual growth remaining positive despite a slight seasonal monthly adjustment.
“London continues to trail in percentage terms but at an average of over £551,000, the London market is hardly on its knees.
“The capital historically lags behind the rest of the UK when it comes to market adjustments and a return to positive growth, but when the tide turns in London, it turns quickly and so we expect a return to upward price appreciation sooner, rather than later.”
